Prestige Stone Australasia Pty Ltd v The Registrar of Titles

[2013] WASC 473

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

IN CHAMBERS

CITATION:   PRESTIGE STONE AUSTRALASIA PTY LTD -v- THE REGISTRAR OF TITLES [2013] WASC 473

CORAM:   BEECH J

HEARD:   19 DECEMBER 2013

DELIVERED          :   19 DECEMBER 2013

PUBLISHED           :  23 DECEMBER 2013

FILE NO/S:   CIV 2892 of 2013

CIV 2893 of 2013

BETWEEN:   PRESTIGE STONE AUSTRALASIA PTY LTD

Plaintiff

AND

THE REGISTRAR OF TITLES
Defendant
 

Catchwords:

Real property - Caveats - Whether operation of caveats should be extended - Turns on own facts

Legislation:

Transfer of Land Act 1893 (WA), s 138B

Result:

Order that the operation of caveats be extended

Category:    B

Representation:

Counsel:

Plaintiff:     Ms B Taylor

Defendant:     No appearance

Interested party             :     Ms J L McGready

Solicitors:

Plaintiff:     Gadens Lawyers

Defendant:     No appearance

Interested party             :     Ms J L McGready

Case(s) referred to in judgment(s):

Bashford v Bashford [2008] WASC 138

Gangemi v Gangemi [2009] WASC 195

KWS Capital Pty Ltd v Love [2013] WASC 294

BEECH J: 

Introduction

1. In 2010, the plaintiff, Prestige Stone Australasia Pty Ltd (PSA), lodged caveats over properties located at 8A Glendower Way, Spearwood and 8B Glendower Way, Spearwood (the Properties).

2. The registered proprietor of the land is Mr Rocco Alvaro.

3. Ms Joanne McGready has obtained a judgment in the District Court against the registered proprietor, Mr Alvaro. Ms McGready obtained a Property (Seizure and Sale) Order in respect of the Properties. She applied under s 138B(1) of the Transfer of Land Act1893 (WA) for the Registrar of Titles to serve a 21 day notice on PSA as caveator.

4. The Registrar served a 21 day notice on PSA under s 138B.

5. In these proceedings, PSA have applied for orders extending the operation of the caveats.

6. On 19 December 2013, I ordered that the operation of the caveats be extended until further order.  These are my reasons.

Evidence relied on by PSA

1. PSA relies on affidavits of Ms Lorna Culver, its sole director, and Mr Rocco Alvaro, the registered proprietor of the Properties.  Ms Culver's evidence is that in 2007 she executed on behalf of PSA a loan agreement with Mr Alvaro.  The loan agreement is annexed to her affidavit.  It provides that Mr Alvaro charged four pieces of property, including the Properties, as security for his indebtedness under the loan agreement.  In May 2007, funds were advanced under the loan agreement.  Ms Culver says that as at 24 December 2013 the total sum of the loan payable will be something just over $1 million.

2. Mr Alvaro says that he agrees with Ms Culver's evidence.

Ms McGready's evidence

1. In summary, Ms McGready's affidavit includes evidence as to the following:

   (1)raising questions as to the relationship between Ms Culver and Mr Alvaro;

   (2)documents and assertions calling into question whether PSA is in fact controlled by Mr Alvaro, not Ms Culver;

   (3)raising questions about the genuineness of the loan agreement transaction;

   (4)raising questions whether the loan agreement transaction was entered into with the object of defeating Mr Alvaro's creditors contrary to s 89 of the Property Law Act 1969 (WA);

   (5)asserting that Ms Culver has failed to attend a means inquiry; and

   (6)stating that at a means inquiry, Mr Alvaro failed to provide required information regarding PSA.

Caveats - legal principles

1. The principles regarding the extension of the operation of a caveat are well known.  Edelman J summarised the principles in KWS Capital Pty Ltd v Love.[1]

   In assessing whether to grant the extension of the caveat the two broad issues are:

   (1)whether the caveator's claim in respect of the estate or interest in land 'has or may have substance', and

   (2)whether the balance of convenience favours the retention of the caveat and the appropriate orders to be made.

   The first issue is whether the caveator's claim in respect of the estate or interest in land 'has or may have substance'.  This is sometimes expressed as whether the caveator can show that there is a serious question to be tried, or whether the caveator can prove a prima facie case.

   The requirement that the caveator's claim of substance be in respect of the estate or interest in land has been held to mean that the claim must concern a 'proprietary interest' in land.

   [1] KWS Capital Pty Ltd v Love [2013] WASC 294 [32] ‑ [36]; see also Gangemi v Gangemi [2009] WASC 195 [38] ‑ [45]; Bashford v Bashford [2008] WASC 138 [42] ‑ [56].

2. I will deal in turn with the two broad issues of whether the claim has or may have substance, and whether the balance of convenience favours the extension of the caveats.

PSA's claim has or may have substance

1. I am satisfied, on the evidence before me, that PSA's claim to an interest under the loan agreement has or may have substance.  The terms of the loan agreement create an interest by way of security in the Properties.  That is sufficient to support a proprietary interest that sustains the caveats.

2. In her submissions, Ms McGready pointed to the questions raised, by the evidence in her affidavit, as I have summarised them.[2]  However, if it is assumed, favourably to Ms McGready, that her affidavit gives rise to questions in these respects, that does not deny that PSA's claim has or may have substance.  To the contrary, the existence of questions to be tried as to the merits of a claim the subject of a caveat generally means that the claim may have substance and is, generally speaking, sufficient to sustain the continued operation of a caveat, subject to questions of the balance of convenience.

   [2] ts 7.

3. An application for the extension or removal of a caveat is not an appropriate occasion to resolve disputed questions of fact.

4. I turn to the balance of convenience.

Balance of convenience

1. The effect of an unconditional removal of the caveats would be to permanently destroy the security interest that is claimed by PSA.  Given that PSA's claim has or may have substance, the destruction of the claimed interest weighs heavily against the unconditional removal of the caveats.

2. In the course of submissions, I raised a question of whether removal of the caveats should be ordered, conditional on any proceeds of sale being retained pending the resolution of any dispute about the genuineness of the loan and the enforceability of the loan agreement.  I am not satisfied that the balance of convenience favours that approach, for two reasons.

3. First, PSA has a signed and apparently genuine document that sustains the interest it claims.  Secondly, in the course of oral submissions, Ms McGready expressed considerable doubt as to whether she wished to embark upon any further proceedings, including any proceedings to challenge the enforceability or genuineness of the loan agreement.[3]

   [3] ts 12 ‑ 13.

4. For these reasons, I was satisfied that the balance of convenience favours the extension of the operation of the caveats.

Conclusion

1. For these reasons, I ordered that the operation of the caveats be extended.